UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
the Securities Exchange Act of 1934
Date of Report: November 25, 2008
Commission file number 1- 32479
TEEKAY LNG PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
4th Floor
Belvedere Building
69 Pitts Bay Road
Hamilton, HM08 Bermuda
(Address of principal executive office)
Belvedere Building
69 Pitts Bay Road
Hamilton, HM08 Bermuda
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover
Form 20-F or Form 40-F.
Form 20-F þ |
Form 40-F o |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1).
Yes o |
No þ |
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7).
Yes o |
No þ |
Indicate by check mark whether the registrant by furnishing the information contained in this
Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under
the Securities Exchange Act of 1934.
Yes o |
No þ |
If “Yes” is marked, indicate below the file number assigned to the registrant in connection
with Rule 12g3-2(b):82-
Item 1 — Information Contained in this Form 6-K Report
Attached as Exhibit I is a copy of an announcement of Teekay LNG Partners L.P. dated November 25,
2008.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| TEEKAY LNG PARTNERS L.P. |
||||
| Date: November 25, 2008 | By: | /s/ Peter Evensen | ||
| Peter Evensen | ||||
| Chief Executive Officer and Chief Financial Officer (Principal Financial and Accounting Officer) |
||||
|
TEEKAY LNG PARTNERS L.P. 4th Floor, Belvedere Building, 69 Pitts Bay Road Hamilton, HM 08, Bermuda |
NEWS RELEASE
TEEKAY LNG PARTNERS REPORTS
RESTATED HISTORICAL RESULTS
Highlights
| • | Teekay LNG has completed its previously announced financial restatement. | |
| • | As anticipated, there is no impact on the Partnership’s previously reported distributable cash flow, liquidity or cash distributions in any period. | |
| • | All restatement adjustments are non-cash in nature and do not affect the economics of the Partnership. | |
| • | The Partnership will host a conference call on Tuesday, November 25, 2008 to discuss its restated results and key elements of its financial position and outlook. |
Hamilton, Bermuda, November 25, 2008 — Teekay LNG Partners L.P. (Teekay LNG or the Partnership)
(NYSE: TGP) today reported that it has restated its previously reported financial results,
including results for fiscal years 2003 through 2007 and the first and second quarters of 2008, to
adjust for:
| • | its accounting treatment for its derivative transactions under the Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging (SFAS 133), as more fully discussed below under “Restatement for Accounting under SFAS 133”; | ||
| • | its accounting treatment for certain vessels it acquired from Teekay Corporation (Teekay) subsequent to the Partnership’s May 2005 initial public offering, whereby the Partnership’s financial statements have been retroactively adjusted to include the historical results of the vessels from the date they were originally acquired by Teekay and began operating, as more fully discussed below under “Restatement for Changes to Accounting for Dropdown Transactions”; and | ||
| • | its financial statement presentation for the Partnership’s interests in the RasGas joint ventures, whereby certain assets and liabilities have been grossed-up for accounting presentation purposes, as more fully discussed below under “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other.” |
“It is important to emphasize that all of the restatement adjustments have no impact on the
Partnership’s distributable cash flow(1), liquidity or cash distributions in any
period,” stated Peter Evensen, Chief Executive Officer of Teekay GP LLC, the Partnership’s general
partner. “Any adjustments to the Partnership’s financial statements are due to changes in
accounting treatment only and have no impact on the economics of the Partnership or its actual cash
flows.”
Mr. Evensen continued, “Any adjustments to net income resulting from the change in the
Partnership’s accounting treatment for hedge transactions are exclusively due to unrealized gains
or losses as a result of the change in the mark-to-market value of our hedging instruments at the
end of each reporting period, which have no cash impact. Additional adjustments, which came into
scope as a result of the Partnership’s detailed and thorough restatement audit, also have no cash
impact. The change to our accounting treatment for vessel dropdowns simply means that vessels
acquired from Teekay are now reflected in the Partnership’s comparative historical financial
statements for periods prior to the Partnership’s actual acquisition of the vessels as if they had
been acquired by the Partnership at the time of their original purchase by Teekay. This adjustment
has no impact on the Partnership’s financial results subsequent to the date the vessels were
acquired by the Partnership. Finally, any gross-up of assets and liabilities related to the
Partnership’s RasGas joint venture interests does not impact partners’ equity or net income and
does not result in any change to the Partnership’s net exposure in these joint ventures.”
| (1) | Distributable cash flow is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other master limited partnerships. Please see Appendix A to this release for a reconciliation of this non-GAAP measure to the most directly comparable GAAP financial measure. |
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A summary of financial information reflecting the restatement adjustments for the three and six
months ended June 30, 2008 and 2007 and the three months ended March 31, 2008 is presented below.
Appendix B to this release provides a summary of the impact of the restatements on reported net
income for the fiscal years ended December 31, 2003 through 2007. Please see “Information on SEC
Filings” below for information about the Partnership’s upcoming filings with the U.S. Securities
and Exchange Commission (SEC) relating to the restatements.
Summary of Restated Second Quarter 2008 Results
Since the restatement adjustments are all non-cash in nature, they have not impacted the
Partnership’s distributable cash flow(1) or cash distributions. During the three months
ended June 30, 2008, the Partnership generated $24.4 million of distributable cash flow, an
increase from $22.2 million for the same quarter last year. For the quarter ended June 30, 2008,
the Partnership raised its quarterly cash distribution by approximately four percent to $0.55 per
unit from $0.53 per unit in the previous quarter. This increase reflects the acquisition of the
two Kenai LNG carriers on April 1, 2008. This cash distribution was paid on August 14, 2008 to all
unitholders of record on August 7, 2008.
On November 3, 2008, the Partnership declared a cash distribution of $0.57 per unit for the quarter
ended September 30, 2008, an increase of $0.02 per unit, or four percent, from the previous
quarter. This distribution increase reflects the contribution from the Partnership’s joint venture
interest in four RasGas 3 LNG carriers delivered between May and July of 2008. This cash
distribution was paid on November 14, 2008 to all unitholders of record on November 7, 2008.
The effect of the accounting adjustments noted above on previously reported net income for the
three and six months ended June 30, 2008 and 2007 and for the three months ended March 31, 2008 is
summarized in the table below. The results of vessels acquired from Teekay relating to the periods
prior to their acquisition by the Partnership are referred to herein as the Dropdown Predecessor.
Net Income (Loss)
| Three Months Ended | Six Months Ended | |||||||||||||||||||||
| June 30, 2008 | March 31, 2008 | June 30, 2007 | June 30, 2008 | June 30, 2007 | ||||||||||||||||||
| (in thousands of US dollars) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
As Previously Reported |
$ | 7,634 | $ | (25,000 | ) | $ | 2,461 | $ | (17,366 | ) | $ | 3,863 | ||||||||||
Adjustments: |
||||||||||||||||||||||
Derivative Instruments
(2) |
22,784 | (17,785 | ) | 39,241 | 4,999 | 45,216 | ||||||||||||||||
Dropdown Predecessor
(3) |
— | 895 | — | 895 | — | |||||||||||||||||
Gross-up Presentation
and Other (4) |
1,298 | (333 | ) | (277 | ) | 965 | (1,189 | ) | ||||||||||||||
As Restated |
$ | 31,716 | $ | (42,223 | ) | $ | 41,425 | $ | (10,507 | ) | $ | 47,890 | ||||||||||
For the three months ended June 30, 2008, the Partnership now reports net income of $31.7 million,
compared to net income of $41.4 million for the same period last year. Net income for the three
months ended June 30, 2008 and 2007 includes unrealized foreign currency translation losses of
$29,000 and $5.7 million, respectively, which primarily relate to long-term debt denominated in
Euros. Net income for the three months ended June 30, 2008 and 2007 also includes non-cash net
gains of $19.8 million and $34.9 million, respectively, relating primarily to changes in fair value
of derivative instruments not qualifying for hedge accounting and the accounting consolidation of
interests in the two Tangguh LNG newbuilding carriers (which the Partnership has not yet acquired)
and in the four RasGas 3 LNG carriers (which the Partnership acquired on May 6, 2008).
For the six months ended June 30, 2008, the Partnership now reports a net loss of $10.5 million,
compared to net income of $47.9 million for the same period last year. Net income for the six
months ended June 30, 2008 and 2007 includes unrealized foreign currency translation losses of
$33.9 million and $10.5 million, respectively, which primarily relate to long-term debt denominated
in Euros. Net income for the six months ended June 30, 2008 and 2007 also includes a non-cash net
loss of $1.3 million and a non-cash net gain of $37.7 million, respectively, relating primarily to
changes in fair value of derivative instruments not qualifying for hedge accounting and the
accounting consolidation of interests in the Tangguh and RasGas 3 LNG carriers.
| (1) | Distributable cash flow is a non-GAAP financial measure used by certain investors to measure the financial performance of the Partnership and other master limited partnerships. Please see Appendix A to this release for a reconciliation of this non-GAAP measure to the most directly comparable GAAP financial measure. | |
| (2) | Please refer to “Restatement for Accounting under SFAS 133” included in this release. | |
| (3) | Please refer to “Restatement for Changes to Accounting for Dropdown Transactions” included in this release. | |
| (4) | Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. |
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Further Information Regarding Restatement Items
Restatement for Accounting under SFAS 133
On August 7, 2008, the Partnership announced that it would restate its historical financial
statements to adjust its accounting treatment for its derivative transactions under SFAS 133. This
restatement adjusts for the Partnership’s interest rate swap agreements and profit sharing swap
agreement that did not qualify for hedge accounting treatment under SFAS 133 as aspects of the
Partnership’s hedge documentation did not meet the strict technical requirements of the standard.
Accordingly, the Partnership has now recognized the changes in the fair value of these derivatives
through the statement of income (loss) rather than directly to partners’ equity on the balance
sheet. This restatement, which is non-cash in nature, has resulted in adjustments to Teekay LNG’s
previously reported net income, but does not affect the economics of any hedging transactions or
have any impact on the Partnership’s previously reported distributable cash flow, liquidity or cash
distributions. The Partnership believes that the applicable derivative transactions were
consistent with its risk management policies and that its overall hedging strategy continues to be
sound.
The Partnership has discontinued the use of hedge accounting for its interest rate swap agreements
and the profit sharing swap agreement. As a result, the unrealized gains and losses due to the
change in the fair values of these derivative instruments will be reflected as increases or
decreases to the Partnership’s voyage revenues, interest expense and interest income going forward.
This change will not impact the economics of hedging transactions nor the Partnership’s
distributable cash flow, liquidity or cash distributions in any future period.
Restatement for Changes to Accounting for Dropdown Transactions
Subsequent to the release of its preliminary second quarter financial results, the Partnership
reviewed and revised its accounting treatment for certain vessels acquired through dropdown
transactions from Teekay. The Partnership has historically accounted for the acquisition of vessel
interests from Teekay as asset acquisitions (rather than business acquisitions) and recorded the
financial results of these vessels commencing from the date the vessels were acquired by Teekay
LNG.
Although substantially all of the value relating to these transactions is attributable to the
vessels and associated contracts, the Partnership has now determined that these related-party
vessel acquisitions should have been accounted for as business acquisitions (rather than asset
acquisitions) under the provision of the Statement of Financial Accounting Standards No. 141,
Business Combinations (SFAS 141). Under SFAS 141, business acquisitions for entities under common
control which have begun operations are required to be accounted for in a manner whereby the
Partnership’s financial statements are retroactively adjusted to include the historical results of
the acquired vessels from the date the vessels were originally under the control of Teekay.
Accordingly, the Partnership has recast its historical financial results, including results for the
quarters ended March 31 and June 30, 2008 and the fiscal years ended December 31, 2003 through
2007. The table below lists the seven vessels acquired by Teekay LNG subsequent to the
Partnerships’ May 2005 initial public offering that formerly operated under Teekay.
Vessel |
Dropdown Predecessor Period |
|
African Spirit
|
November 10, 2003 to November 22, 2005 | |
European Spirit
|
September 26, 2003 to November 22, 2005 | |
Asian Spirit
|
January 5, 2004 to November 22, 2005 | |
Granada Spirit
|
December 6, 2004 to May 9, 2005 | |
Dania Spirit
|
April 1, 2003 to December 31, 2006 | |
Polar Spirit
|
December 13, 2007 to March 31, 2008 | |
Arctic Spirit
|
December 14, 2007 to March 31, 2008 | |
The retroactive adjustments to reflect the results of the Dropdown Predecessor have resulted in
changes to Teekay LNG’s previously reported net income and total partners’ equity. As they are
non-cash in nature, these adjustments have not resulted in changes to the Partnership’s previously
reported distributable cash flow, liquidity or cash distributions. The Dropdown Predecessor
adjustments have no effect on the previously reported net income for the three months ended June
30, 2008, or partners’ equity as at June 30, 2008.
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Restatement for Gross-up Presentation of RasGas Joint Ventures and Other
Subsequent to the release of its preliminary second quarter financial results, the Partnership
reviewed and revised its financial statement presentation for debt and interest rate swap
agreements related to its joint venture interests in the three RasGas II and four RasGas 3 LNG
carriers. As a result, certain of the Partnership’s assets and liabilities have been grossed up
for accounting presentation purposes. These adjustments, which do not affect the Partnership’s net
income, distributable cash flow, liquidity, cash distributions or partners’ equity in any period,
are described below. All RasGas II and RasGas 3 carriers have now been delivered and are currently
operating under long-term, fixed-rate contracts.
In January 2006, the Partnership entered into a sale and 30-year leaseback arrangement pertaining
to shipbuilding contracts for its 70 percent interest in the three RasGas II LNG carriers. In
accordance with Emerging Issues Task Force Issue 97-10, The Effect of Lessee Involvement in Asset
Construction, the Partnership has now recorded on its December 31, 2006 balance sheet the
accumulated construction cost of these vessels and related capital lease obligations for the period
subsequent to the RasGas II sale-leaseback transaction as the Partnership retained certain
construction period risks. This adjustment does not impact the accounting treatment for these
vessels in any period following their delivery in the first quarter of 2007. The Partnership has
restated its consolidated balance sheet as at December 31, 2006 to record the accumulated cost of
approximately $295 million for these vessels under construction, and related capital lease
obligations.
Through a wholly-owned subsidiary, the Partnership owns a 40 percent interest in the four RasGas 3
LNG carriers. The joint venture partner, a wholly-owned subsidiary of Qatar Gas Transport Company,
owns the remaining 60 percent interest. Both wholly-owned subsidiaries are joint and several
co-borrowers with respect to the RasGas 3 term loan and related interest rate swap agreements.
Previously, the Partnership recorded 40 percent of the RasGas 3 term loan and interest rate swap
obligations in its financial statements. The Partnership has now made adjustments to its balance
sheet to reflect 100 percent of the RasGas 3 term loan and interest rate swap obligations, as well
as offsetting increases in assets, for the fourth quarter of 2006 through the second quarter of
2008. As the Partnership is a joint and several borrower, it has also made adjustments to its
statements of income (loss) to reflect 100 percent of the interest expense on the RasGas 3 term
loan with an offsetting amount to interest income from its advances to the joint venture. These
RasGas 3 adjustments do not result in any increase to the Partnership’s net exposure in the joint
ventures.
The Partnership has also restated certain other items primarily relating to amounts attributable to
non-controlling interests.
Information on SEC Filings
More detailed financial information relating to the restatements will be included in the amended
Form 20-F/A for the fiscal year ended December 31, 2007 (certain financial information will be
included for annual fiscal periods from 2003 through 2007), in the amended Form 6-K/A for the
quarter ended March 31, 2008 and in the Form 6-K for the quarter ended June 30, 2008, which the
Partnership expects to file with or furnish to, as applicable, the SEC and make available on its
website at www.teekaylng.com no later than December 5, 2008. For a summary of the impact of the
restatement on reported net income for the fiscal years ended December 31, 2003 through 2007,
please refer to Appendix B of this release.
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About Teekay LNG Partners L.P.
Teekay LNG Partners L.P. is a publicly-traded master limited partnership formed by Teekay
Corporation (NYSE: TK) as part of its strategy to expand its operations in the LNG and LPG
shipping sectors. Teekay LNG Partners L.P. provides LNG, LPG and crude oil marine transportation
services under long-term, fixed-rate time-charter contracts with major energy and utility
companies through its fleet of 15 LNG carriers, six LPG carriers and eight Suezmax class crude oil
tankers. Two of the 15 LNG carriers are newbuildings scheduled for delivery between late-2008 and
early-2009. Five of the six LPG carriers are newbuildings scheduled for delivery in 2009 and
2010.
Teekay LNG Partners’ common units trade on the New York Stock Exchange under the symbol “TGP”.
Conference Call
Teekay LNG plans to host a conference call at 2:00 p.m. ET on Tuesday, November 25, 2008, to
discuss the Partnership’s restated results. In addition, the Partnership will take the
opportunity to discuss key elements of its financial position and outlook. All unitholders and
interested parties are invited to listen to the live conference call at www.teekaylng.com
or by dialing (866) 322-8032, or (416) 640-3406 if outside North America, and quoting confirmation
code 3198467. The Partnership plans to make available a recording of the conference call until
midnight December 2, 2008 by dialing (888) 203-1112 or (647) 436-0148, and entering access code
3198467, or via the Partnership’s web site until December 24, 2008.
An investor presentation to accompany this conference call will be made available on the
Partnership’s web site at www.teekaylng.com prior to the start of the call.
For Investor Relations enquiries contact:
Kent Alekson
Tel: +1 (604) 609-6442
Kent Alekson
Tel: +1 (604) 609-6442
For Media enquiries contact:
Alana Duffy
Tel: +1 (604) 844-6605
Alana Duffy
Tel: +1 (604) 844-6605
Web site: www.teekaylng.com
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TEEKAY LNG PARTNERS L.P.
SUMMARY RESTATED CONSOLIDATED STATEMENT OF INCOME
(in thousands of U.S. dollars, except unit data)
| Three Months Ended June 30, 2008 | |||||||||||||||||||||
| Adjustments | |||||||||||||||||||||
| Gross-up | |||||||||||||||||||||
| As Previously | Derivative | Dropdown | Presentation | As | |||||||||||||||||
| Reported | Instruments (1) | Predecessor (2) | and Other (3) | Restated | |||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
VOYAGE REVENUES (4) |
$ | 71,592 | $ | (9,276 | ) | — | — | $ | 62,316 | ||||||||||||
OPERATING EXPENSES |
|||||||||||||||||||||
Voyage expenses |
649 | — | — | — | 649 | ||||||||||||||||
Vessel operating expenses |
20,792 | — | — | — | 20,792 | ||||||||||||||||
Depreciation and amortization |
18,872 | — | — | — | 18,872 | ||||||||||||||||
General and administrative |
5,745 | — | — | — | 5,745 | ||||||||||||||||
| 46,058 | — | — | — | 46,058 | |||||||||||||||||
Income from vessel operations |
25,534 | (9,276 | ) | — | — | 16,258 | |||||||||||||||
OTHER ITEMS |
|||||||||||||||||||||
Interest (expense) gain (5) |
(29,602 | ) | 74,328 | — | (4,330 | ) | 40,396 | ||||||||||||||
Interest income (loss) (6) |
12,828 | (23,183 | ) | — | 4,330 | (6,025 | ) | ||||||||||||||
Foreign exchange loss |
(29 | ) | — | — | — | (29 | ) | ||||||||||||||
Other income (loss) — net |
17 | (559 | ) | — | — | (542 | ) | ||||||||||||||
Income before non-controlling interest |
8,748 | 41,310 | — | — | 50,058 | ||||||||||||||||
Non-controlling interest |
(1,114 | ) | (18,526 | ) | — | 1,298 | (18,342 | ) | |||||||||||||
Net income |
$ | 7,634 | $ | 22,784 | — | $ | 1,298 | $ | 31,716 | ||||||||||||
Limited partners’ units outstanding: |
|||||||||||||||||||||
Weighted-average number of common
units outstanding |
|||||||||||||||||||||
- Basic and diluted |
29,899,726 | 29,494,930 | |||||||||||||||||||
Weighted-average number of
subordinated units outstanding |
|||||||||||||||||||||
- Basic and diluted |
12,629,633 | 13,034,429 | |||||||||||||||||||
Weighted-average number of total
units outstanding |
|||||||||||||||||||||
- Basic and diluted |
42,529,359 | 42,529,359 | |||||||||||||||||||
| (1) | Please refer to “Restatement for Accounting under SFAS 133” included in this release. | |
| (2) | Please refer to “Restatement for Changes to Accounting for Dropdown Transactions” included in this release. | |
| (3) | Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. | |
| (4) | Restated voyage revenues includes $9.3 million of unrealized losses for the three months ended June 30, 2008 relating to the change in fair value of a profit sharing swap agreement between the Partnership and Teekay for the Toledo Spirit time charter contract. | |
| (5) | Restated interest (expense) gain includes $76.2 million of unrealized gains for the three months ended June 30, 2008 relating to the change in fair value of interest rate swap agreements that do not qualify for hedge accounting. | |
| (6) | Restated interest income (loss) includes $23.2 million of unrealized losses for the three months ended June 30, 2008 relating to the change in fair value of the Partnership’s non-designated RasGas II defeasance deposit interest rate swap agreements that do not qualify for hedge accounting. |
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TEEKAY LNG PARTNERS L.P.
SUMMARY RESTATED CONSOLIDATED STATEMENT OF LOSS
(in thousands of U.S. dollars, except unit data)
| Three Months Ended March 31, 2008 | |||||||||||||||||||||
| Adjustments | |||||||||||||||||||||
| Gross-up | |||||||||||||||||||||
| As | Derivative | Dropdown | Presentation | As | |||||||||||||||||
| Reported | Instruments (1) | Predecessor (2) | and Other (3) | Restated | |||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
VOYAGE REVENUES (4) |
$ | 66,022 | $ | (2,694 | ) | 10,283 | — | $ | 73,611 | ||||||||||||
OPERATING EXPENSES |
|||||||||||||||||||||
Voyage expenses |
295 | — | 113 | — | 408 | ||||||||||||||||
Vessel operating expenses |
15,400 | — | 3,007 | — | 18,407 | ||||||||||||||||
Depreciation and amortization |
16,072 | — | 2,718 | — | 18,790 | ||||||||||||||||
General and administrative |
3,960 | — | 495 | — | 4,455 | ||||||||||||||||
| 35,727 | — | 6,333 | — | 42,060 | |||||||||||||||||
Income from vessel operations |
30,295 | (2,694 | ) | 3,950 | — | 31,551 | |||||||||||||||
OTHER ITEMS |
|||||||||||||||||||||
Interest expense (5) |
(33,058 | ) | (64,791 | ) | (3,055 | ) | (4,631 | ) | (105,535 | ) | |||||||||||
Interest income (6) |
11,947 | 26,213 | — | 4,631 | 42,791 | ||||||||||||||||
Foreign exchange loss |
(33,891 | ) | — | — | — | (33,891 | ) | ||||||||||||||
Other (loss) income — net |
(388 | ) | 243 | — | — | (145 | ) | ||||||||||||||
Loss (income) before
non-controlling interest |
(25,095 | ) | (41,029 | ) | 895 | — | (65,229 | ) | |||||||||||||
Non-controlling interest |
95 | 23,244 | — | (333 | ) | 23,006 | |||||||||||||||
Net loss (income) |
$ | (25,000 | ) | $ | (17,785 | ) | $ | 895 | $ | (333 | ) | $ | (42,223 | ) | |||||||
Limited partners’ units outstanding: |
|||||||||||||||||||||
Weighted-average number of common
units outstanding |
|||||||||||||||||||||
- Basic and diluted |
22,540,547 | 22,540,547 | |||||||||||||||||||
Weighted-average number of
subordinated units outstanding |
|||||||||||||||||||||
- Basic and diluted |
14,734,572 | 14,734,572 | |||||||||||||||||||
Weighted-average number of total
units outstanding |
|||||||||||||||||||||
- Basic and diluted |
37,275,119 | 37,275,119 | |||||||||||||||||||
| (1) | Please refer to “Restatement for Accounting under SFAS 133” included in this release. | |
| (2) | Relates to the results of the Dropdown Predecessor (as at June 30, 2008) for the Polar Spirit and Arctic Spirit from January 1 to March 31, 2008, when the vessels were under the common control of Teekay prior to their acquisition by Teekay LNG. Please refer to “Restatement for Changes to Accounting for Dropdown Transactions” included in this release. | |
| (3) | Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. | |
| (4) | Restated voyage revenues includes $2.7 million of unrealized losses for the three months ended March 31, 2008 relating to the change in fair value of a profit sharing swap agreement between the Partnership and Teekay for the Toledo Spirit time charter contract. | |
| (5) | Restated interest expense includes $67.3 million of unrealized losses for the three months ended March 31, 2008 relating to the change in fair value of interest rate swap agreements that do not qualify for hedge accounting. | |
| (6) | Restated interest income includes $26.2 million of unrealized gains for the three months ended March 31, 2008 relating to the change in fair value of the Partnership’s non-designated RasGas II defeasance deposit interest rate swap agreements that do not qualify for hedge accounting. |
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TEEKAY LNG PARTNERS L.P.
SUMMARY RESTATED CONSOLIDATED STATEMENT OF INCOME
(in thousands of U.S. dollars, except unit data)
| Three Months Ended June 30, 2007 | |||||||||||||||||||||
| Adjustments | |||||||||||||||||||||
| Gross-up | |||||||||||||||||||||
| As | Derivative | Dropdown | Presentation | As | |||||||||||||||||
| Reported | Instruments (1) | Predecessor (2) | and Other (3) | Restated | |||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
VOYAGE REVENUES (4) |
$ | 65,282 | $ | 13,035 | — | — | $ | 78,317 | |||||||||||||
OPERATING EXPENSES |
|||||||||||||||||||||
Voyage expenses |
274 | — | — | — | 274 | ||||||||||||||||
Vessel operating expenses |
13,930 | — | — | — | 13,930 | ||||||||||||||||
Depreciation and amortization |
16,555 | — | — | — | 16,555 | ||||||||||||||||
General and administrative |
3,759 | — | — | — | 3,759 | ||||||||||||||||
| 34,518 | — | — | — | 34,518 | |||||||||||||||||
Income from vessel operations |
30,764 | 13,035 | — | — | 43,799 | ||||||||||||||||
OTHER ITEMS |
|||||||||||||||||||||
Interest (expense) gain (5) |
(35,819 | ) | 67,551 | — | (4,079 | ) | 27,653 | ||||||||||||||
Interest income (loss) (6) |
13,020 | (27,047 | ) | — | 4,079 | (9,948 | ) | ||||||||||||||
Foreign exchange loss |
(5,682 | ) | — | — | — | (5,682 | ) | ||||||||||||||
Other loss — net |
(271 | ) | (558 | ) | — | — | (829 | ) | |||||||||||||
Income before non-controlling interest |
2,012 | 52,981 | — | — | 54,993 | ||||||||||||||||
Non-controlling interest |
449 | (13,740 | ) | — | (277 | ) | (13,568 | ) | |||||||||||||
Net income |
$ | 2,461 | $ | 39,241 | — | $ | (277 | ) | $ | 41,425 | |||||||||||
Limited partners’ units outstanding: |
|||||||||||||||||||||
Weighted-average number of common
units outstanding |
|||||||||||||||||||||
- Basic and diluted |
21,327,360 | 21,327,360 | |||||||||||||||||||
Weighted-average number of
subordinated units outstanding |
|||||||||||||||||||||
- Basic and diluted |
14,734,572 | 14,734,572 | |||||||||||||||||||
Weighted-average number of total
units outstanding |
|||||||||||||||||||||
- Basic and diluted |
36,061,932 | 36,061,932 | |||||||||||||||||||
| (1) | Please refer to “Restatement for Accounting under SFAS 133” included in this release. | |
| (2) | Please refer to “Restatement for Changes to Accounting for Dropdown Transactions” included in this release. | |
| (3) | Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. | |
| (4) | Restated voyage revenues includes $13.0 million of unrealized gains for the three months ended June 30, 2007 relating to the change in fair value of a profit sharing swap agreement between the Partnership and Teekay for the Toledo Spirit time charter contract. | |
| (5) | Restated interest (expense) gain includes $63.6 million of unrealized gains for the three months ended June 30, 2007 relating to the change in fair value of interest rate swap agreements that do not qualify for hedge accounting. | |
| (6) | Restated interest income (loss) includes $27.0 million of unrealized losses for the three months ended June 30, 2007 relating to the change in fair value of the Partnership’s non-designated RasGas II defeasance deposit interest rate swap agreements that do not qualify for hedge accounting. |
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8
TEEKAY LNG PARTNERS L.P.
SUMMARY RESTATED CONSOLIDATED STATEMENT OF LOSS
(in thousands of U.S. dollars, except unit data)
| Six Months Ended June 30, 2008 | |||||||||||||||||||||
| Adjustments | |||||||||||||||||||||
| Gross-up | |||||||||||||||||||||
| As Previously | Derivative | Dropdown | Presentation | As | |||||||||||||||||
| Reported | Instruments (1) | Predecessor (2) | and Other (3) | Restated | |||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
VOYAGE REVENUES (4) |
$ | 137,614 | $ | (11,970 | ) | $ | 10,283 | — | $ | 135,927 | |||||||||||
OPERATING EXPENSES |
|||||||||||||||||||||
Voyage expenses |
944 | — | 113 | — | 1,057 | ||||||||||||||||
Vessel operating expenses |
36,192 | — | 3,007 | — | 39,199 | ||||||||||||||||
Depreciation and amortization |
34,944 | — | 2,718 | — | 37,662 | ||||||||||||||||
General and administrative |
9,705 | — | 495 | — | 10,200 | ||||||||||||||||
| 81,785 | — | 6,333 | — | 88,118 | |||||||||||||||||
Income from vessel operations |
55,829 | (11,970 | ) | 3,950 | — | 47,809 | |||||||||||||||
OTHER ITEMS |
|||||||||||||||||||||
Interest (expense) gain (5) |
(62,660 | ) | 9,537 | (3,055 | ) | (8,961 | ) | (65,139 | ) | ||||||||||||
Interest income (6) |
24,775 | 3,030 | — | 8,961 | 36,766 | ||||||||||||||||
Foreign exchange loss |
(33,920 | ) | — | — | — | (33,920 | ) | ||||||||||||||
Other loss — net |
(371 | ) | (316 | ) | — | — | (687 | ) | |||||||||||||
(Loss) income before non-controlling
interest |
(16,347 | ) | 281 | 895 | — | (15,171 | ) | ||||||||||||||
Non-controlling interest |
(1,019 | ) | 4,718 | — | 965 | 4,664 | |||||||||||||||
Net (loss) income |
$ | (17,366 | ) | $ | 4,999 | $ | 895 | $ | 965 | $ | (10,507 | ) | |||||||||
Limited partners’ units outstanding: |
|||||||||||||||||||||
Weighted-average number of common
units outstanding |
|||||||||||||||||||||
- Basic and diluted |
26,220,136 | 26,017,738 | |||||||||||||||||||
Weighted-average number of
subordinated units outstanding |
|||||||||||||||||||||
- Basic and diluted |
13,682,103 | 13,884,501 | |||||||||||||||||||
Weighted-average number of total units
outstanding |
|||||||||||||||||||||
- Basic and diluted |
39,902,239 | 39,902,239 | |||||||||||||||||||
| (1) | Please refer to “Restatement for Accounting under SFAS 133” included in this release. | |
| (2) | Relates to the results of the Dropdown Predecessor for two vessels, the Polar Spirit and Arctic Spirit, from January 1, 2008 to March 31, 2008 when the vessels were under the common control of Teekay prior to their acquisition by Teekay LNG. Please refer to “Restatement for Changes to Accounting for Dropdown Transactions” included in this release. | |
| (3) | Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. | |
| (4) | Restated voyage revenues includes $12.0 million of unrealized losses for the six months ended June 30, 2008 relating to the change in fair value of a profit sharing swap agreement between the Partnership and Teekay for the Toledo Spirit time charter contract. | |
| (5) | Restated interest (expense) gain includes $8.9 million of unrealized gains for the six months ended June 30, 2008 relating to the change in fair value of interest rate swap agreements that do not qualify for hedge accounting. | |
| (6) | Restated interest income includes $3.0 million of unrealized gains for the six months ended June 30, 2008 relating to the change in fair value of the Partnership’s non-designated RasGas II defeasance deposit interest rate swap agreements that do not qualify for hedge accounting. |
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9
TEEKAY LNG PARTNERS L.P.
SUMMARY RESTATED CONSOLIDATED STATEMENT OF INCOME
(in thousands of U.S. dollars, except unit data)
| Six Months Ended June 30, 2007 | |||||||||||||||||||||
| Adjustments | |||||||||||||||||||||
| Gross-up | |||||||||||||||||||||
| As | Derivative | Dropdown | Presentation | As | |||||||||||||||||
| Reported | Instruments (1) | Predecessor (2) | and Other (3) | Restated | |||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||||
VOYAGE REVENUES (4) |
$ | 123,611 | $ | 14,408 | — | — | $ | 138,019 | |||||||||||||
OPERATING EXPENSES |
|||||||||||||||||||||
Voyage expenses |
540 | — | — | — | 540 | ||||||||||||||||
Vessel operating expenses |
27,751 | — | — | — | 27,751 | ||||||||||||||||
Depreciation and amortization |
32,374 | — | — | — | 32,374 | ||||||||||||||||
General and administrative |
7,277 | — | — | — | 7,277 | ||||||||||||||||
| 67,942 | — | — | — | 67,942 | |||||||||||||||||
Income from vessel operations |
55,669 | 14,408 | — | — | 70,077 | ||||||||||||||||
OTHER ITEMS |
|||||||||||||||||||||
Interest (expense) gain (5) |
(66,166 | ) | 75,905 | — | (6,926 | ) | 2,813 | ||||||||||||||
Interest income (loss) (6) |
24,117 | (31,108 | ) | — | 6,926 | (65 | ) | ||||||||||||||
Foreign exchange loss |
(10,482 | ) | — | — | — | (10,482 | ) | ||||||||||||||
Other loss — net |
(791 | ) | (754 | ) | — | — | (1,545 | ) | |||||||||||||
Income before non-controlling interest |
2,347 | 58,451 | — | — | 60,798 | ||||||||||||||||
Non-controlling interest |
1,516 | (13,235 | ) | — | (1,189 | ) | (12,908 | ) | |||||||||||||
Net income (loss) |
$ | 3,863 | $ | 45,216 | — | $ | (1,189 | ) | $ | 47,890 | |||||||||||
Limited partners’ units outstanding: |
|||||||||||||||||||||
Weighted-average number of common
units outstanding |
|||||||||||||||||||||
- Basic and diluted |
20,786,956 | 20,786,956 | |||||||||||||||||||
Weighted-average number of
subordinated units outstanding |
|||||||||||||||||||||
- Basic and diluted |
14,734,572 | 14,734,572 | |||||||||||||||||||
Weighted-average number of total
units outstanding |
|||||||||||||||||||||
- Basic and diluted |
35,521,528 | 35,521,528 | |||||||||||||||||||
| (1) | Please refer to “Restatement for Accounting under SFAS 133” included in this release. | |
| (2) | Please refer to “Restatement for Changes to Accounting for Dropdown Transactions” included in this release. | |
| (3) | Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. | |
| (4) | Restated voyage revenues includes $14.4 million of unrealized gains for the six months ended June 30, 2007 relating to the change in fair value of a profit sharing swap agreement between the Partnership and Teekay for the Toledo Spirit time charter contract. | |
| (5) | Restated interest (expense) gain includes $70.9 million of unrealized gains for the six months ended June 30, 2007 relating to the change in fair value of interest rate swap agreements that do not qualify for hedge accounting. | |
| (6) | Restated interest income (loss) includes $31.1 million of unrealized losses for the six months ended June 30, 2007 relating to the change in fair value of the Partnership’s non-designated RasGas II defeasance deposit interest rate swap agreements that do not qualify for hedge accounting. |
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10
TEEKAY LNG PARTNERS L.P.
SUMMARY RESTATED CONSOLIDATED BALANCE SHEET
(in thousands of U.S. dollars)
| As at June 30, 2008 | ||||||||||||||||||||
| Adjustments | ||||||||||||||||||||
| Gross-up | ||||||||||||||||||||
| As Previously | Derivative | Dropdown | Presentation | As | ||||||||||||||||
| Reported | Instruments (1) | Predecessor (2) | and Other (3) | Restated | ||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||
ASSETS |
||||||||||||||||||||
Cash and cash equivalents |
78,811 | — | — | — | 78,811 | |||||||||||||||
Restricted cash — current |
33,520 | — | — | — | 33,520 | |||||||||||||||
Other current assets |
17,385 | — | — | 22,674 | 40,059 | |||||||||||||||
Restricted cash — long-term |
661,608 | — | — | — | 661,608 | |||||||||||||||
Vessels and equipment |
1,810,796 | — | — | — | 1,810,796 | |||||||||||||||
Advances on newbuilding contracts |
322,897 | — | — | — | 322,897 | |||||||||||||||
Other assets |
506,380 | — | — | 465,209 | 971,589 | |||||||||||||||
Intangible assets |
146,370 | — | — | — | 146,370 | |||||||||||||||
Goodwill |
39,279 | — | — | — | 39,279 | |||||||||||||||
Total Assets |
3,617,046 | — | — | 487,883 | 4,104,929 | |||||||||||||||
LIABILITIES AND PARTNERS’ EQUITY |
||||||||||||||||||||
Accounts payable and accrued liabilities |
62,929 | — | — | 3,402 | 66,331 | |||||||||||||||
Current portion of long-term debt and capital leases |
206,609 | — | — | (99,203 | ) | 107,406 | ||||||||||||||
Current portion of long-term debt related to
newbuilding vessels to be delivered |
47,226 | — | — | 4,656 | 51,882 | |||||||||||||||
Advances from affiliates and joint venture partners |
105,364 | — | — | — | 105,364 | |||||||||||||||
Long-term debt and capital leases |
2,012,323 | — | — | 435,080 | 2,447,403 | |||||||||||||||
Long-term debt related to newbuilding vessels to be
delivered |
234,708 | — | — | 144,354 | 379,062 | |||||||||||||||
Other long-term liabilities |
66,915 | (1,800 | ) | — | 5,903 | 71,018 | ||||||||||||||
Non-controlling interest |
58,287 | — | — | (10,991 | ) | 47,296 | ||||||||||||||
Partners’ equity |
822,685 | 1,800 | — | 4,682 | 829,167 | |||||||||||||||
Total Liabilities and Partners’ Equity |
3,617,046 | — | — | 487,883 | 4,104,929 | |||||||||||||||
| (1) | Please refer to “Restatement for Accounting under SFAS 133” included in this release. | |
| (2) | Please refer to “Restatement for Changes to Accounting for Dropdown Transactions” included in this release. | |
| (3) | Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. |
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11
TEEKAY LNG PARTNERS L.P.
SUMMARY RESTATED CONSOLIDATED BALANCE SHEET
(in thousands of U.S. dollars)
| As at December 31, 2007 | ||||||||||||||||||||
| Adjustments | ||||||||||||||||||||
| Gross-up | ||||||||||||||||||||
| As | Derivative | Dropdown | Presentation | As | ||||||||||||||||
| Reported | Instruments (1) | Predecessor (2) | and Other (3) | Restated | ||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||
ASSETS |
||||||||||||||||||||
Cash and cash equivalents |
91,891 | — | — | — | 91,891 | |||||||||||||||
Restricted cash — current |
26,662 | — | — | — | 26,662 | |||||||||||||||
Other current assets |
21,709 | — | 400 | 7,512 | 29,621 | |||||||||||||||
Restricted cash — long-term |
652,567 | — | — | — | 652,567 | |||||||||||||||
Vessels and equipment |
1,595,731 | — | 229,068 | — | 1,824,799 | |||||||||||||||
Advances on newbuilding contracts |
240,773 | — | — | — | 240,773 | |||||||||||||||
Other assets |
407,264 | — | — | 354,825 | 762,089 | |||||||||||||||
Intangible assets |
150,935 | — | — | — | 150,935 | |||||||||||||||
Goodwill |
39,279 | — | — | — | 39,279 | |||||||||||||||
Total Assets |
3,226,811 | — | 229,468 | 362,337 | 3,818,616 | |||||||||||||||
LIABILITIES AND PARTNERS’ EQUITY |
||||||||||||||||||||
Accounts payable and accrued liabilities |
42,587 | — | 208 | — | 42,795 | |||||||||||||||
Current portion of long-term debt and capital leases |
187,635 | — | — | 187,635 | ||||||||||||||||
Current portion of long-term debt related to
newbuilding vessels to be delivered |
27,153 | — | — | 7,512 | 34,665 | |||||||||||||||
Advances from affiliates and joint venture partners |
40,950 | — | 228,142 | — | 269,092 | |||||||||||||||
Long-term debt and capital leases |
1,586,073 | — | — | — | 1,586,073 | |||||||||||||||
Long-term debt related to newbuilding vessels to be
delivered |
421,536 | — | — | 353,082 | 774,618 | |||||||||||||||
Other long-term liabilities |
63,437 | — | — | 9,631 | 73,068 | |||||||||||||||
Non-controlling interest |
158,077 | — | — | (16,699 | ) | 141,378 | ||||||||||||||
Partners’ equity |
699,363 | — | 1,118 | 8,811 | 709,292 | |||||||||||||||
Total Liabilities and Partners’ Equity |
3,226,811 | — | 229,468 | 362,337 | 3,818,616 | |||||||||||||||
| (1) | Please refer to “Restatement for Accounting under SFAS 133” included in this release. | |
| (2) | Relates to the results of the Dropdown Predecessor (based on Form 6-K for the quarter ended June 30, 2008, to be furnished with the SEC no later than December 5, 2008) for the Polar Spirit and Arctic Spirit as at December 31, 2007, when the vessels were under the common control of Teekay prior to their acquisition by Teekay LNG. Please refer to “Restatement for Changes to Accounting for Dropdown Transactions” included in this release. | |
| (3) | Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. |
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12
TEEKAY LNG PARTNERS L.P.
SUMMARY RESTATED CONSOLIDATED STATEMENT OF CASH FLOWS
(in thousands of U.S. dollars)
| For the Six Months Ended June 30, 2008 | ||||||||||||||||||||
| Adjustments | ||||||||||||||||||||
| Gross-up | ||||||||||||||||||||
| As Previously | Derivative | Dropdown | Presentation | As | ||||||||||||||||
| Reported | Instruments (1) | Predecessor (2) | and Other (3) | Restated | ||||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||
Cash and cash equivalents provided by (used for) |
||||||||||||||||||||
OPERATING ACTIVITIES |
||||||||||||||||||||
Net operating cash flow |
66,195 | — | 4,497 | (5,431 | ) | 65,261 | ||||||||||||||
FINANCING ACTIVITIES |
||||||||||||||||||||
Excess of purchase price over the contributed
basis of Teekay Nakilat (III) Holdings
Corporation |
— | — | — | (12,192 | ) | (12,192 | ) | |||||||||||||
Distribution to Teekay Corporation for the
purchase of Kenai LNG carriers |
— | — | (230,000 | ) | — | (230,000 | ) | |||||||||||||
Proceeds from long-term debt |
491,503 | — | — | 124,293 | 615,796 | |||||||||||||||
Capitalized loan costs |
(1,329 | ) | — | — | — | (1,329 | ) | |||||||||||||
Scheduled repayments of long-term debt and
capital leases |
(22,928 | ) | — | — | — | (22,928 | ) | |||||||||||||
Prepayments of long-term debt |
(245,000 | ) | — | — | — | (245,000 | ) | |||||||||||||
Decrease in restricted cash |
1,228 | — | — | — | 1,228 | |||||||||||||||
Net advances from affiliates |
8,140 | — | (7,778 | ) | — | 362 | ||||||||||||||
Net advances from joint venture partners |
593 | — | — | — | 593 | |||||||||||||||
Cash distributions paid |
(45,026 | ) | — | — | — | (45,026 | ) | |||||||||||||
Proceeds from issuance of units |
202,519 | — | — | — | 202,519 | |||||||||||||||
Equity distribution from Teekay Corporation |
— | — | 3,281 | — | 3,281 | |||||||||||||||
Net financing cash flow |
389,700 | — | (234,497 | ) | 112,101 | 267,304 | ||||||||||||||
INVESTING ACTIVITIES |
||||||||||||||||||||
Advances to joint venture |
(87,198 | ) | — | — | (124,293 | ) | (211,491 | ) | ||||||||||||
Receipt of Spanish re-investment tax credit |
— | — | — | 5,431 | 5,431 | |||||||||||||||
Return of capital of Teekay BLT Corporation to
Teekay Corporation |
(19,600 | ) | — | — | — | (19,600 | ) | |||||||||||||
Purchase of Teekay Nakilat (III) Holdings
Corporation |
(49,095 | ) | — | — | 12,192 | (36,903 | ) | |||||||||||||
Purchase of Kenai LNG carriers |
(230,000 | ) | — | 230,000 | — | — | ||||||||||||||
Expenditures for vessels and equipment |
(83,082 | ) | — | — | — | (83,082 | ) | |||||||||||||
Net investing cash flow |
(468,975 | ) | — | 230,000 | (106,670 | ) | (345,645 | ) | ||||||||||||
Decrease in cash and cash equivalents |
(13,080 | ) | — | — | — | (13,080 | ) | |||||||||||||
Cash and cash equivalents, beginning of the period |
91,891 | — | — | — | 91,891 | |||||||||||||||
Cash and cash equivalents, end of the period |
78,811 | — | — | — | 78,811 | |||||||||||||||
| (1) | Please refer to “Restatement for Accounting under SFAS 133” included in this release. | |
| (2) | Relates to classification adjustments for the Dropdown Predecessor for two vessels, the Polar Spirit and Arctic Spirit, from January 1 to March 31, 2008, when the vessels were under the common control of Teekay prior to their acquisition by Teekay LNG. Please refer to “Restatement for Changes to Accounting for Dropdown Transactions” included in this release. | |
| (3) | Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. |
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13
TEEKAY LNG PARTNERS L.P.
APPENDIX A — RESTATED RECONCILIATION OF NON-GAAP FINANCIAL MEASURE
(in thousands of U.S. dollars)
Description of Non-GAAP Financial Measure — Distributable Cash Flow (DCF)
Distributable cash flow represents net income adjusted for depreciation and amortization expense,
non-controlling interest, non-cash items, estimated maintenance capital expenditures, gains and
losses on vessel sales, income taxes and foreign exchange related items. Unrealized gains and
losses on derivative instruments that do not qualify for hedge accounting are non-cash items to the
Partnership and thus, have no impact on the Partnership’s distributable cash flow. Maintenance
capital expenditures represent those capital expenditures required to maintain over the long-term
the operating capacity of, or the revenue generated by, the Partnership’s capital assets.
Distributable cash flow is a quantitative standard used in the publicly-traded partnership
investment community to assist in evaluating a partnership’s ability to make quarterly cash
distributions. Distributable cash flow is not required by United States generally accepted
accounting principles and should not be considered as an alternative to net income or any other
indicator of the Partnership’s performance required by United States generally accepted accounting
principles. The table below reconciles distributable cash flow to net income.
| Three Months Ended June 30, 2008 | |||||||||||||||||
| Adjustments | |||||||||||||||||
| Gross-up | |||||||||||||||||
| As Previously | Derivative | Presentation | As | ||||||||||||||
| Reported | Instruments (1) | and Other (2) | Restated | ||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||
Net Income |
7,634 | 22,784 | 1,298 | 31,716 | |||||||||||||
Add: |
|||||||||||||||||
Depreciation and amortization |
18,872 | — | — | 18,872 | |||||||||||||
Non-controlling interest |
1,114 | 18,526 | (1,298 | ) | 18,342 | ||||||||||||
Foreign exchange loss |
29 | — | — | 29 | |||||||||||||
Non-cash interest expense and other |
5,438 | (41,869 | ) | — | (36,431 | ) | |||||||||||
Equity loss of RasGas 3 joint venture |
1,627 | — | — | 1,627 | |||||||||||||
Income tax expense |
— | 559 | — | 559 | |||||||||||||
Less: |
|||||||||||||||||
Estimated maintenance capital
expenditures |
7,151 | — | — | 7,151 | |||||||||||||
Income tax recovery |
551 | — | — | 551 | |||||||||||||
Partnership’s share of RasGas 3
DCF before estimated maintenance
capital expenditures |
934 | — | — | 934 | |||||||||||||
Distributable Cash Flow before
Non-Controlling Interest |
26,078 | — | — | 26,078 | |||||||||||||
Non-controlling interests’ share of
DCF before estimated maintenance
capital expenditures |
(1,678 | ) | — | — | (1,678 | ) | |||||||||||
Distributable Cash Flow |
24,400 | — | — | 24,400 | |||||||||||||
| (1) | Results are net of non-controlling interest. Please refer to “Restatement for Accounting under SFAS 133” included in this release. | |
| (2) | Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. |
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TEEKAY LNG PARTNERS L.P.
APPENDIX B — SUMMARY OF RESTATED AND RETROACTIVELY ADJUSTED
FINANCIAL RESULTS
(in thousands of U.S. dollars)
The table below summarizes the impact on the Partnership’s previously reported net income for
fiscal years ended December 31, 2003 through 2007, as a result of the restatements described in
this release under “Restatement for Accounting under SFAS 133”, “Restatement for Changes to
Accounting for Dropdown Transactions” and “Restatement for Gross-up Presentation of RasGas Joint
Ventures and Other”. Retroactive adjustments to reflect the results of the Dropdown Predecessor
based on the acquisitions completed by the Partnership as of December 31, 2007.
| Net Income (Loss) | |||||||||||||||||||||
| Year Ended December 31, | |||||||||||||||||||||
| 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||
| (in thousands of US dollars) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||||||
As Previously Reported |
$ | (9,438 | ) | $ | (9,591 | ) | $ | 79,547 | $ | (68,231 | ) | $ | (59,432 | ) | |||||||
Adjustments: |
|||||||||||||||||||||
Derivative
Instruments (1) |
35,210 | 22,654 | (22,676 | ) | (43,678 | ) | — | ||||||||||||||
Dropdown
Predecessor (2) |
— | (123 | ) | 4,971 | 9,824 | 3,096 | |||||||||||||||
Gross-up Presentation
and Other (3) |
(630 | ) | (1,811 | ) | — | — | — | ||||||||||||||
As Restated |
$ | 25,142 | $ | 11,129 | $ | 61,842 | $ | (102,085 | ) | $ | (56,336 | ) | |||||||||
| (1) | Relates to unrealized gains (losses) as a result of the change in fair value of certain derivative instruments. Results are net of non-controlling interest. Please refer to “Restatement for Accounting under SFAS 133” included in this release. | |
| (2) | Relates to the results of the Dropdown Predecessor for the following vessels and periods, when the vessels were under the common control of Teekay but prior to their acquisition by Teekay LNG: African Spirit from November 10, 2003 to November 22, 2005; European Spirit from September 26, 2003 to November 22, 2005; Asian Spirit from January 5, 2004 to November 22, 2005; Granada Spirit from December 6, 2004 to May 9, 2005; and Dania Spirit from April 1, 2003 to December 31, 2006. Please refer to “Restatement for Changes to Accounting for Dropdown Transactions” included in this release. | |
| (3) | Please refer to “Restatement for Gross-up Presentation of RasGas Joint Ventures and Other” included in this release. |
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